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The
dollar index traded 0.2% higher on the day, at 91.174.. On
Friday, it fell as low as 90.981 after data showed the U.S.
economy created fewer jobs than expected in January and job
losses the previous month were greater than initially reported.
Speculators have been reducing short positions - bets the dollar
will weaken - on the currency. Some analysts have flagged the
likelihood that the same speculators will be forced out of their
short positions by a rise in the dollar.
Net bearish bets on the dollar by speculators fell to $29.95
billion for the week ended Feb. 2, compared with a net short
position of $33.81 billion for the previous week, according to
calculations by Reuters and U.S. Commodity Futures Trading
Commission data.
Francesco Pesole, FX strategist at ING said, that even if the
USD recovery stalls, "we could continue to see evidence of a USD
short squeeze in the coming weeks".
The euro traded 0.2% lower against the dollar on Monday, at
$1.2029.
In a note to clients, J.P. Morgan strategists said they "have
growing confidence of underperformance of EUR vs USD".
"That warrants two changes to the portfolio: 1) rotating away
from USD to fund trades primarily out of EUR, and 2) selling EUR/USD
outright in spot."
Investor morale in the euro zone unexpectedly fell in February
as lockdowns to suppress the COVID-19 caseload left their mark
on the economy, which lost touch with other regions in the world
as they recovered further, a survey by Sentix showed.
Sentix's investor sentiment index for the euro zone fell back
into negative territory, dropping to -0.2 from 1.3 in January. A
Reuters poll had pointed to a reading of 1.9.
The British pound bought $1.3686, 0.3% lower to the dollar.
The dollar was quoted at 105.62 yen, having pulled back from a
three-month high reached on Friday.
In the cryptocurrency market, ethereum spot prices rose nearly
3% to $1,660 after the listing of ethereum futures on the
Chicago Mercantile Exchange on Sunday.
Bitcoin, the world's biggest cryptocurrency by market
capitalisation, rose 1.2% to $39,347.
The onshore yuan edged up to 6.4547 per dollar, but trade is
likely to be subdued before the week-long Chinese New Year
holidays beginning Thursday.
Elsewhere, the Australian dollar was off 0.3% at $0.7657. Across
the Tasman Sea, the New Zealand dollar traded 0.2% lower at
$0.7182.
(Reporting by Ritvik Carvalho; Additional reporting by Stanley
White in Tokyo; Editing by Larry King and Alison Williams)
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